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Madan Machine Tools, New Delhi Vs. Financial Commissioner of Sales Tax, Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 255 of 1975
Judge
Reported inILR1979Delhi56; [1979]43STC464(Delhi)
ActsBengal Finance (Sales Tax) Act, 1941; Central Sales Tax Act, 1956 - Sections 9(3); Delhi Sales Tax Rules, 1951 - Rule 60
AppellantMadan Machine Tools, New Delhi
RespondentFinancial Commissioner of Sales Tax, Delhi and ors.
Advocates: B. Kirpal and; R.C. Chawla, Advs
Cases ReferredIn Suryalakshmi Cotton Mills Ltd. v. Deputy Commissioner of Commercial Taxes
Excerpt:
bengal finance (sales tax) act (1941) as extended to the union territory of delhi read with central sales tax act (1956) - sections 9(3), 20(1) & 20(3)--delhi sales tax rules (1951), rules 60 to 64--whether the admitted sales tax to be paid before or with the filing of the memorandum of appeal--limitation, if any prescribed for such payment--maintainability of writ petition or revision.; as follows :-; (1) section and rules provide that the appellate authority is debarred from entering the appeal until it is satisfied that the admitted tax has been paid. further, the proviso to section 20(1) of the said act does not provide for any extension of the period for payment of admitted tax. the payment is to be made within limitation or such other extended period, which for cause shown, the.....leila seth, j. (1) this petition under article 226 of the constitution of india is directed against the orders dated 17 january, 1972, 4 december, 1973, 25th june, 1974 and ii october, 1974 of the assessing authority assistant commissioner of sales tax, new delhi, deputy commissioner of sales tax, new delhi and the financial commissioner, delhi, respectively under the central sales tax act, 1956 read with tht bengal finance sales tax act, 1941 as extended to the union territory of delhi (hereinafter referred to as the said act). (2) the facts in brief are as follows : the petitioner-assessed is a partnership firm carrying on the business of manufacture and sale of tools and is registered under the said act as well as the central sales tax act, 1956. in respect of the assessment year.....
Judgment:

Leila Seth, J.

(1) This petition under Article 226 of the Constitution of India is directed against the orders dated 17 January, 1972, 4 December, 1973, 25th June, 1974 and Ii October, 1974 of the Assessing Authority Assistant Commissioner of Sales Tax, New Delhi, Deputy Commissioner of Sales Tax, New Delhi and the Financial Commissioner, Delhi, respectively under the Central Sales Tax Act, 1956 read with tht Bengal Finance Sales Tax Act, 1941 as extended to the Union Territory of Delhi (Hereinafter referred to as the said Act).

(2) The facts in brief are as follows : The petitioner-assessed is a partnership firm carrying on the business of manufacture and sale of tools and is registered under the said Act as well as the Central Sales Tax Act, 1956. In respect of the assessment year 1967-68, the petitioner filed its sales-tax returns as also revised returns both under the said Act and the Central Sales Tax Act, 1956. Assessment order both under the said Act and the Central Sales Tax Act, 1956 were passed exparte on 17th January, 1972. The exparte orders were made after a number of opportunities had been given to the petitioner to submit Explanationns and adjournments had been allowed for this purpose. Thereafter on 6th February 1973 the petitioner deposited Rs. 395.25 as tax. A demand notice was served on the petitioner on 13th March, 1973 and an appeal under Section 20 of the said Act was filed by the Petitioner on 18th April, 1973. A notice was received by the petitioner on 14th June. 1973 to show-cause as to why the appeal be not dismissed for want of payment of admitted tax. Thereafter on 11th September, 1973 the petitioner deposited the sum of Rs. 305- as the balance amount of admitted tax. An application for condensation of delay was also filed. The appeal was then put up on 27th November, 1973. The Assistant Commissioner of Sales Tax by his order dated 4th December, 1973 dismissed the appeal in liming, as according to him, the appeal was barred by limitation and the Explanationn offered for inordinate delay was not convincing and as such there was no ground for condensation. It was also held in the said order that the appeal would be deemed to have been preferred against the assessment order only on the 11th September. 1973 as that was the date on which the admitted tax was paid and , thereforee, it was obvious that the appeal had been filed late by nearly four months. In coming to this conclusion the Assistant Commissioner of Sales Tax, New Delhi relied on a decision of the Supreme Court in Lalta Prasad Khinni Lal v. The Assistant Commissioner (Judicial) Sales Tax, Kanpur Range-1 and another. 29 Sales Tax Cases, 201(1). Being dissatisfied with the order the petitioner filed a revision petition under Section 20(3) of the said Act. The Deputy Commissioner of Sales Tax, New Delhi by his order dated 25th June. 1974 held that there was no sufficient ground on record to warrant condensation of delay in filing the appeal beyond the prescribed period of 60 days. As such he refused to interfere with the order of the Assistant Commissioner, Sales Tax, New Delhi dated 4th December, 1973. The Deputy Commissioner dismissed the revision petition on 25th June. 1974. Thereafter a further revision under Section 9(3) of the Central Sales Tax, 1956 read with section 20(3) of the said Act was filed. By his order dated 11th October, 1974 theFinancial Commissioner rejected the revision petition.

(3) In the writ petition, the petitioner has prayed for quashing of the orders dated 17th January, 1972, 4th December, 1973, 25th June, 1974 and 11th October, 1974. In the alternative; a prayer is made for directions in the nature of mandamus to decide the petitioner's appeal and revisions on merits and/or direction to the Assessing Authority to accept the returns of the petitioner and pass assessment orders afresh in accordance with law.

(4) The main point urged by learned counsel for the petitioner is that on a correct interpretation of the proviso to Section 20(1) of the said Act, it is not necessary to deposit the admitted tax before or with the filing of the memorandum of appeal. It is further contended that there is no period of limitation within which the tax admitted to be due by the petitioner is to be paid. It is urged, that as long as the admitted tax is paid before the appeal is 'entertained', it will be in order The submission is that the limitation of sixty days mentioned in Section 20(1) of the said Act relates only to the filing of the appeal and not to the payment of tax admitted to be due. In this connection learned counsel for the petitioner has relied on a decision of the Supreme Court in Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (Judicial) I, Sales Tax. Kanpur Range, Kanpur and another, 21, Sales Tax Cases, 154(2) and a full bench decision of the Patna High Court in Brij Behari Lal v. Firm Srinivas Ram Kumar and others Air 1939 Pat 248.

(5) Learned counsel for the respondent however, contends that the tax admitted to be due not having been paid within the period of limitation and the condensation application having been rejected, the appeal was time barred. He submits that Section 20(1) and the proviso thereto read with Rules 60 to 64 of the Delhi Sales Tax Rules, 1951 and form S.T. Xxix also make this clear.

(6) In order to appreciate the rival contentions, Section 20(1) of the said Act is set out :

'20.Appeal revision and review Any dealer may in the prescribed manner appeal to the prescribed authority against any assessment within sixty days or such further period as may be allowed by the Commissioner for cause shown to his satisfaction from the receipt of a notice issued under sub-section (3) of section Ii in respect thereof : 'Provided that no appeal shall be entertained by the said authority unless he is satisfied that such amount of the tax as the appellant may admit to be due from him has been paid.'

(7) The power to frame rules is provided under Section 26 of the said Act and Section 26(2) (o) is as follows :

'THEmanner in which, and the authority to which, appeals against assessment may be preferred under Section 20.'

and Section 26(2) (p) provides for :

'THEprocedure for and other matters (includiag fees) incidental to, the disposal of appeals and applications for revisions and reviews under section 20.'

Under sub-section (4) of Section 26 all rules made are to be laid for not less than 30 days before each House of Parliament and shall be subject to such modifications as Parliament may make during the Session in which they are so laid or the session immediately following.

(8) Rules have been made under the above provisions and these arc the Delhi Sales Tax Rules, 1951. Rule 60 indicates that an appeal against an order of assessment passed by a Sales Tax Officer shall lie to the Assistant Commissioner. Rule 61 provides that the memorandum of appeal shall be presented in duplicate in Form S.T. Xxix to the appellate authority and shall be signed either by the dealer or by a person duly authorised. Rule 62 of the said Rules requires, inter alia. that the memorandum of appeal shall be endorsed by the appellant or his agent to the effect that the amount of tax assessed and the penalty (if any) imposed or the tax and penalty admitted to be due, has been paid Rule 63 thereafter goes on to state, that the appeal may be summarily rejected, if the appellant after being given an opportunity in this behalf fails to comply with any of the requirements of Rules 61 and 62. Further, Rule 64 provides that if the appellate authority does not reject the appeal summarily, he shall fix a date for hearing the parties.

(9) Form S. T. Xxix of the Delhi Sales Tax Rules, 1951 which is the prescribed form for filing an appeal under Section 20(1) requires an endorsement to the effect, 'that the tax admitted by me to be due in respect of the order of assessment appealed against has been paid by treasury challan dated..........'

(10) The first decision relied upon by learned counsel for the petitioner is Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range, Kanpur and another, 21 S TC 154. In the said decision the Supreme Court was considering Section 9 of the U.P. Sales Tax Act, 1948 which is in the following terms :

'(1)Any dealer objecting to an order allowing or refusing an application for exemption certificate under clause (b) of sub-section (1) of section 4 or to an order refusing an application under Section 30 or to an order imposing a penalty under section 15-A or to an assessment made under section 7, 7A, 7B, 18 or 21, may within 30 days from the date of service of the copy of the order or notice of assessment, as the case may be, appeal to such authority as may be prescribed ; Provided that no appeal against an assessment shall be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to he due or of such Installments there of as may have become payable.'

(11) Rule 66 of the U.P. Sales Tax Rules, 1948 requires that the memorandum of appeal should be accompanied by a challan showing a deposit in the Treasury of the tax admitted by the appellant to be due. It was held that I he proviso to section 9 was general and that the court should accept satisfactory proof. Rules 66 laid down one uncontestable moode of proof which the Court will always accept, but did not exclude the operation of the proviso of Section 9 when equally satisfactory proof is made available to the Officer hearing the appeal and it is proved to his satisfaction that the payment of the tax has been duly made intime. It was further held that Rule 66 is only directory and provides only cue of the modes of proof that the tax has been duly paid. In that case the question a row as to at what stage the satisfactory proof is to be available. As such the meaning of the word 'entertained' had to be decided. The discussion in the said judgment with regard to the meaning of word 'entertained' is as follows :

'DOESit mean that no appeal shall be received or filed or does it mean that no appeal shall be admitted for hearing and disposed of unless satisfactory proof is available? The dictionary meaning of the word 'entertain' was brought to our notice by the parties and both sides agreed that it means either 'to deal with or admit to consideration'. We are also of the same opinion. The question, thereforee, is at what stage can the appeal be said to be entertained for the purpose of the application of die proviso Is it 'entertained' when it is filed or is it 'entertain' when it is admitted and the date is fixed for bearing or is it finally 'entertained' when it is heard and disposed of Numerous cases exist in the law reports in which the word 'entertained' or similar cognate expressions have been interpreted by the courts'.

(12) After dealing with various decisions it was held that the word 'entertained' means admit to consideration and this is 'the first occasion on which the court takes up the matter for consideration. It may be at the admission stage or if by the rules of that Tribunal the appeals are automatically admitted, it will be the time of hearing of the appeals. But on the first occasion when the court takes up the matter for consideration, satisfactory proof must be presented that the tax was paid within the period of limitation available for the appeal'.

(13) It is pertinent to note that in this decision of the Supreme Court the payment was to be made within limitation. In fact the payment had been made within limitation, even before the appeal had been filed but the treasury receipt had not been attached. It was only the proof that could be supplied before or at the time of entertainment of the appeal. It was not a case where payment was made beyond limitation and as such is not on all fours with the present case.

(14) The other case relied on by the petitioner is Brij Behari Lal v. Firm Srinivas Ram Kumar and others, Air 1939 Pat 248. In that case the full bench of the Patna High Court was interpreting the amended Order Xxi rule 90, Civil Procedure Code which was in these terms :

'(1)Where any immovable property has been sold in execution of a decree, the decree-holder, or any person entitled to share in a rateable distribution of assets, or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of a material irregularity or fraud in publishing or conducting it : (i) Provided that no application to set aside a sale shall be admitted unless. (a) It discloses a ground which could not have been put forward by the applicant before the sale was conducted, and (b) the applicant deposits with his application such amount not exceeding 121/2 per cent of the sum realized by the sale or such other security as the Court may in its discretion fix, unless the Court, for reasons to be recorder. dispenses with the deposit. (ii) Provided further that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. (2) In case the application is unsuccessful the costs of the opposit parly shall be a first charge upon the deposit referred to in Proviso (i) (h), if any.'

(15) An application to set aside a sale must be made within thirty days from the date of the sale. (Limitation Act, 1908, Sch. 1. Art. 166). In that case an execution salt was held on 4th August, 1936, Application for setting aside the sale was made on 2nd September, 1936 but without deposit. The application was forthwith registered as a miscellaneous application and notices were issued to the opposite parties. On 10th October, 1936 the applicant applied to the Court to accept a deposit of 121 per cent of the proceeds of sale. On 14th October, 1936 the sum was deposited in Court. The Court Actually accepted the deposit. At a later stage the opposite party raised an objection that as no deposit was made along with the application as required by clause (b) of the substituted Proviso, the application was time-barred. The Full Bench held that

'EVENif the original admission of this application could not be justified, the acceptance of this deposit and the subsequent proceedings clearly show that the application was properly admitted at the date of the deposit and the Court was bound thereafter to adjudicate upon it.'

It also held that

'WHEREno deposit accompanies an application to set a side a sale the Court has no power to reject such application forthwith. On the other hand, it must give the applicant an opportunity to urge that the deposit should be dispensed with or to deposit the full or lesser amount or other security before some date fixed for admission. If the orders of the court are complied with, the application must be admitted and heard upon the merits provided that it complies also with the substituted Proviso (i) (a).'

(16) While interpreting the words 'unless the applicant deposit with his application such amount, etc.', the Court held that does not mean 'unless the applicant deposits at the time of making the application. 121/2 per cent of the sale proceeds, or such other sum or security as the Court has previously, directed,' nor do the terms of the Proviso make it clear that an application to dispense with the deposit or for leave to deposit less than 121/2 per cent of the sale proceeds or to give some other security, must be made before an application for setting aside the sale. Harries C. J stated :

'THELimitation Act only requires that the application be made within thirty days of the sale, and in my view there is nothing in the substituted Proviso to suggest that the money or other security must be deposited within limitation. The substituted Proviso is complied if such is made before actual admission and the date of admission cannot be governed by the Limitation Act.'

(17) It is true, that in the Patna High Court full bench decision, the deposit was made after the time limit for filing the application had expired. The decision, however, was based on the particular wording of Order Xxi rule 90 and in fact there was nothing to suggest that the money or other security had to be deposited within limitation rather after recording reasons the deposit could be dispensed with. In the present case section 20 (1) of the said Act provides that the dealer can appeal in the prescribed manner and the rules and forms prescribed under the said Act as above mentioned make it clear that the tax admitted to be due is to be paid with the memorandum of appeal.

(18) The decision in Lalta Prasad Khinni Lal v. The Assistant Commissioner (Judicial), Sales Tax, Kanpur Range-1, and another, 29, Sales Tax Cases, 201 on which the Assistant Commissioner Sales Tax has relied in his order dated 14th December, 1973 also considers Section 9 of the U.P. Sales Tax Act, 1948. In the said decision it was held that if a memorandum of appeal has been filed within the period of limitation but without proof of the payment of the amount of admitted tax accompanying it, that appeal can be said to have been preferred only when proof of payment of tax is furnished. 'In other words, the appeal will be deemed to have been properly filed on the date on -which the amount of admitted tax is paid, (emphasis ours). If that is beyond the period of 30 days, the appeal will be barred by time'. Section 9(6) will come into operation and it will be open to the appellant to apply for condensation of delay under that provision. The correct approach is to treat the appeal as having been preferred on the date on which proof of payment of the tax was furnished and then to see whether under section 9(6) there was sufficient cause for excusing the delay in preferring the appeal.

(19) The question in issue in the said decision of the Supreme Court was whether the appellate authority had erred in rejecting the memorandum of appeal on the ground that the delay in depositing the admitted tax could not be condoned under Section 5 of the Limitation Act. While considering the decision in Lakshiniratan Engineering Works Ltd. v. Assistant Commissioner (J) I, Sales Tax, Kanpur, 21, Sales Tax Cases, 154, the Court states as follows :

'WEhave found considerable difficulty in discovering how that decisions could afford any assistance to she repondents in the present case. Indeed, according to that decision the words 'no appeal shall be entertained' in the proviso to section 9 do not denote the filing of the memorandum of appeal but refer to the point of time when tlic appeal is being considered. thereforee, though the memorandum of appeal filed within time is not accompanied by the treasury challan showing payment of tax if before the appeal is being considered satisfactory proof of payment of tax is given then the proviso to section 9 is satisfied. In the present case when the assessed produced the necessary documents which showed that the deposit of the full amount had been made by May 27. 1966, the appeal became entertainable. It only suffered from the defect that it was barred by time on that date. The assessed could, thereforee, apply under Section 9(6) for extending the period of limitation in accordance with section 5 of the Limitation Act. It is entirely a different matter whether on, the facts of the present case the appellate authority would have condoned the delay or not but to say that the appellate authority had no jurisdiction to extend the time simply because the amount of admitted tax had been deposited beyond the period of 30 days would be wholly erroneous and would not represent a true and correct view of the provisions of Section 9. It may be pointed out that the case of Lakshmiratan Engineering Works (supra) on which the High Court largely relied did not involve the question of the extension of the period of limitation under Section 9(6). Indeed in our judgment the word 'entertain' in section 9(1) has hardly any material bearing on the point under consideration.'

In, the circumstances the case was remanded for reconsideration as the Supreme Court held that the Appellate Authority had jurisdiction to extend the period of limitation.

(20) In the present case the admitted tax has been, paid after the period of limitation has expired, as was the case in Lalta Prasad Khinni Lal (supra) An application for condensation of delay was made and this was rejected. We are not here concerned with whether the appellate authority rejected the application for condensation of delay correctly or not. Nor are we concerned whether on the same facts we would have allowed the application for condensation. The appellate authority exercised its jurisdiction and applied its mind to the application for condensation and thereafter rejected it. This was confirmed by the Revisional authority.

(21) Learn, counsel for the petitioner, however, contends that the provisions of Section 9 of the U.P. Sales Tax Act, 1948 and the Rules there under and the provision in Section 20 of the said Act and the Rules there under are different and as such the decision contained in Lalta Prasad Khinni Lal (supra) is not applicable. It appears to us that the provisions though not in pari materia are in substance similar. Section 9(6) of the U.P. Sales Tax Act, 1948 provides that section 5 of the Limitation Act, 1908, would apply to appeals and is comparable to Section 20 of the said Act which lays down that appeals should be filed within 60 days or such further period as may be allowed by the Commissioner for cause shown to his satisfaction.

(22) Looking at the provisions of Section 20 of the said Act and the Delhi Sales Tax Rules it would appear that the appeal cannot be 'entertained' i.e. heard or admitted for consideration until the authority is satisfied that the tax admitted to be due is paid. This is clear from the section. The question that arises is by which date must this admitted tax be paid. Section 20 provides that the appeal to the prescribed authority must be in the prescribed manner and within 60 days of the receipt of the notice issued under sub-section (3) of section II. It further provides that the Commissioner for cause shown to his satisfaction may allow a further period. The prescribed manner is set out in Rules 61 and 62 and provides for, inter alia, an endorsement in the memorandum of appeal that the tax and penalty admitted to be due has been paid. This would clearly indicate that it is contemplated that the admitted tax be paid before or at the time of filing of the memorandum of appeal, otherwise the memorandum of appeal wilt be defective.

(23) Rule 63 as above mentioned gives power to the appellate authority to summarily reject the appeal but only after an opportunity has been given, to comply with the requirements of rules 61 and 62. Such a notice was issued by the appellate authority and received by the petitioner on 14th June, 1973. It is only thereafter that the petitioner deposited the remaining amount of the admitted tax and made an application, for condensation of delay, the appeal having become time barred on 13th May, 1973. It would appear that the Section and Rules provide that the appellate authority is debarred from entertaining the appeal until it is satisfied that the admitted tax has been paid. Further, the proviso to Section 20(1) of the said Act does not provide for any extension of the period for payment of admitted tax. The payment is to be made within limitation or such other extended period, which for cause shown, the appellate authority may allow i.e. the appellate authority has jurisdiction to condone the delay. There is a clear distinction between presentation of an appeal and 'entertaining' an appeal. The appeal is to be presented within 60 days from the receipt of notice or such further time as allowed by the Commissioner. The appeal, however, cannot be entertained or admitted for consideration or heard till the appellate authority is satisfied that the admitted tax is paid. The satisfaction of appellate authority with regard to the payment of admitted tax is a condition Precedent for entertainment of the appeal. In other words the non-payment of the admitted tax is a fetter to the 'entertainment' of the appeal. The proviso to Section 20(1) of the said Act, however, docs not suggest that the limitation of 60 days or such further time as may be allowed by the Commissioner is to be extended till the entertainment of the appeal.

(24) The tax admitted to be due can, be :

(1)paid before the presentation of the memorandum of appeal, (2) paid at the time of the presentation of the memorandum of appeal, (3) paid thereafter but within the prescribed period for the presentation of the appeal, and (4) paid after the period prescribed for presentation of the appeal.

If the tax admitted to be due is paid before or along with the memorandum of appeal, there is no difficulty and the appeal is clearly entertainable on the satisfaction of the authority that it has been so paid. If, on the other hand, the admitted tax is paid before the period of limitation expires but after the presentation of the memorandum of appeal, then it would be open to the petitioner to satisfy the authority that the appeal is entertainable as the defect has been removed within the period of limitation. However, if the tax admitted to be due is paid after the period of limitation has expired, then it would be open to the petitioner, for cause shown, to get an extension of the period and get the delay condoned. If the appellate authority condones the delay, then the appeal will be entertainable. The time when the appeal would be entertained is dependent on the appellate authority. If, however, the appellate authority fails' to condone the delay, then the appeal shall not, be entertainable as it has been summarily rejected as time barred. The proviso to Section 20 cannot be read in isolation,. It must be read with section 20(1) and Rules 60 to 64 and Form S.T. XXIX. In the circumstances is would appear that the memorandum of appeal filed on the 18th April, 1973 was defective. On a notice to show cause, as to why the appeal be not dismissed for want of payment of admitted tax, received by the petitioner on 14th June, 1973, the petitioner deposited the balance of the admitted amount of tax on 11th September, 1973 and removed the defect. As such the appeal would be deemed to have been properly filed on 11th September, 1973. But by this date it had become time barred. The petitioner's application for condensation of delay was rejected on merits. For the reasons outlined above, we reject the main contention of learned counsel for the petitioner.

(25) Learned counsel for the petitioner further contends that Rule 62(a) which provides for an endorsement at the presentation of appeal by the appellant or his agent 'that the amount of tax assessed and the penalty (if any) imposed or the tax and penalty admitted to be due, has been paid', is in conflict with the proviso to Section 20(1) of the said Act. The argument is that the proviso to Section 20(1) permits the payment of admitted tax till the first hearing and this rule calling upon the appellant to make an endorsement that the admitted tax has been paid at the time of the filing of the memorandum of appeal is had because it curtails the period within which the admitted tax can be paid as provided in Section 20(1) of the said Act. In view of our decision on the main point, that what the proviso to section 20(1) provides is a fetter to the hearing or consideration of the appeal till that authority is satisfied, that the admitted tax has been, paid, and not an extension of the period of limitation for payment of the admitted tax, the contention is untenable.

(26) Anticipating an. argument that since a reference to the High Court is available under Section 21 of the said Act, the alternative remedy not having been exhausted, a petition under Article 226 of the Constitution of India would not be maintainable, learned counsel for the petitioner stated that since the appeal had not been entertained, there was no valid appeal and a reference under Section, 21 would not be competent. He cited a decision reported in Commissioner of Income-tax v. National Small Industries Corporation Ltd., 91 I.E.R. 579. He also urged that in, a reference under Section 21 of the said Act, the virus of the statute cannot be challenged. He contended that under the provisions of sub-section (3) of Section 20 of the said Act against any order passed a revision can be filed before the Commissioner and subsequently to the Chief Commissioner without payment of tax; whereas under sub-section (1) read with the proviso to section 20 no appeal can be filed without payment of tax. As such he submitted that the provisions of Section 20(1) and the proviso are clearly discriminatory and there is no reasonable classification having relation to the objects sought to be achieved. It was further submitted that similar provisions were struck down by the Andhra Pradesh High Court in Suryalakshmi Cotton Mills Ltd. and another v. Deputy Commissioner of Commercial Taxes, Hyderabad and others, 23 S TC 178.

(27) In reply learned counsel for the respondents urged that the appeal was not invalid but time barred. He further contended that the petitioner cannot be allowed to defeat his right of appeal by his own. action and then move the High Court by a writ petition under Article 226 of the Constitution of India. He also urged that under the amended Article 226 of the Constitution of India the writ petition was not maintainable. He submitted that the challenge on, the question of virus of Section 20(1) of the said Act was not of substance and as such only an excuse to come by way of a writ petition. Further the decision of the Andhra Pradesh High Court in. Suryalakshmi Cotton Mills Ltd. and another v. Deputy Commissioner of Commercial Taxes, Hyderabad Division 23 ST C 178 was clearly distinguishable.

(28) We need not spend too much time on the question of maintainability of the writ petition. It is well settled that if the virus of the statute is challenged, then the authorities under the statute cannot determine this question. The question whether the challenge raised to the virus of the provisions of the statute ultimately succeeds or fails is not relevant. If there is a genuine challenge to the virus of the provisions of the statute, then a petition under Article 226 of the Constitution of India is maintainable.

(29) The question of discrimination as raised by the learned counsel for the petitioner fails to take into consideration the second proviso to sub-section (3) of Section 20 of the said Act which is as follows : 'Provided further that no application for revision shall lie to the Commissioner in respect of any assessment if an appeal lies under sub-section (1) to the Commissioner in repeat of such assessment.' This clearly indicates that if an appeal is competent against an order of assessment then. a revision will not lie. As such no question of discrimination arises, as there is no question of as assesses being similarly situate. In Suryalakshmi Cotton Mills Ltd. v. Deputy Commissioner of Commercial Taxes' (supra) the Andhra Pradesh High Court was dealing with a challenge to the virus of Section 21(6) of the Andhra Pradesh General Sales Tax. 1957. The Court held, that under the Andhra Pradesh General Sales Act. 1957, while appeals against orders passed in revision by the Deputy Commissioner under Section 20(2) arc subject, under Section 21(6), to the condition of proof of payment of the entire tax before it can be entertained, appeals against orders passed in revision under section 20(2) by authorities higher than the assessing authorities and lower than the Deputy Commissioner or appeals against orders passed in revision, by the Board of Revenue under section, 20(2), or appeals against the orders of the Deputy Commissioner himself under Section 14(4-C) are not subject to such a fetter. The petitioners filed petitions un,der Article 226 of the Constitution and challenged the validity of section 21(6) on the ground that it is vocative of Article 14 and 19(l)(f) and (g) of the Constitution.

(30) The Court held that there is n,o rationale having a reasonable basis for the discrimination made by Section 21(6) between orders passed by the Deputy Commissioner under Section 20 on the one hand, and orders passed under that section by authorities either superior or inferior to the Deputy Commissioner or even orders passed by the Deputy Commissioner under Section 14(4-C) on the other. Section 21(6) was, thereforee, held to be discriminatory and vocative of Article 14 of the Constitution of India and was struck down to the extent that it placed a fetter on, an appeal against the orders of the Deputy Commissioner under Section 20(2). In the said case at page 186 it was observed :

'THEfetter imposed by sub-section (6) of section 21 appears to be more to depend upon a fortuitous circumstance of similar revisional powers being exercised by a particular authority.'

(31) As stated above, in the present case no question of discrimination arises as the assesseds are not similarly situate and further Section 20(1) of the said Act is dealing with an appellate power whereas Section 20(3) of the said Act is dealing with a revisional power, and the second proviso to Section 20(3) makes it clear that no revision will lie where an appeal lies against an order of assessment.

(32) In the result, we hold that the writ petition is maintainable, but reject it on merits for the reasons set out above. In the circumstances, there will be no order as to costs.


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